Planning fees to rise by 20%, as government starts review into ‘landbanking’

Housing and Planning Minister Alok Sharma this week announced that planning fees would be increasing by 20% in the next few weeks, as promised by the Housing White Paper.

In a Parliamentary debate on Wednesday, Sharma rejected the full cost recovery approach which has been on the Conservative agenda for many years, but kept open the option to charge more.

The 20% increase in planning fees will be enacted in statutory regulations over the coming weeks and is a step towards addressing the widespread concerns of under-resourced local planning authorities. With housing one of the major issues in politics now, the Minister stressed the importance of having well-resourced, effective and efficient local authority planning departments to provide new homes and deliver economic growth. He also stated that they expected local authorities to match the recommended fee increases with an ongoing improvement of service.

Rejecting full cost recovery, the Minister said that this, by itself, does not provide a link to service improvements. “Charging at cost recovery removes the incentives for local authorities to reduce their cost, if they know they can pass the cost directly on to applicants. However, with this 20% increase, it will still be the case that most planning fees represent a small fraction of the full cost of any development to which they relate.”

The extra cost comes at a time when former cabinet minister Sir Oliver Letwin is looking at ‘landbanking’. Letwin is expected to bring a forensic approach to his review of the gap between permissions granted and homes built, and will report in the Spring.

To get in touch with us about the White Paper, the government’s review into planning, or Sir Oliver Letwin’s review into ‘landbanking’, email us.